Financial Makeovers for 2009

Invest more: Given the pain most investors experienced last year, one common reaction is to stop contributing to retirement plans or other automatic investment plans. But that's the wrong response.

Rather, said Herb Montgomery of Montgomery Financial Group LLC in Orleans, Mass., investors should "increase their contributions to their investment accounts in order to take advantage of the current sale prices in the equity markets."

At some point there will be a rebound, and those who've been investing recently will benefit.

Related

Investor Woe: Funds Fall, Taxes Rise

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Retirement Savings: Pay Lower Taxes Now

Don't forget the charities: Laura Scharr-Bykowsky of Ascend Financial Planning LLC in Columbia, S.C., said it's easy in times like these to cut charitable contributions, but she urges people to draw up a charity budget just as they would spending budget.

"An alternative way of tithing is to budget 10 percent of all the money that you spend for the year, your budget, and earmark it for your favorite charities. People tend to neglect charitable spending when times are tough, but this may help them feel that they are still doing what they can."

Don't do anything that you don't understand: Finally, some sound advice in any economy from Mike Oswalt of Partners Financial Planning, LLC in Clemmons, N.C.

"Take your time," Oswalt said. "When it comes to financial decisions, including investing or spending large sums of money, be sure you understand the investment or the true value of the product you are purchasing. None of us know everything there is to know about personal finance, but each of us should make it a goal to learn more."

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

David McPherson is founder and principal of Four Ponds Financial Planning in Falmouth, Mass. He previously worked as a financial writer and editor for The Providence Journal in Rhode Island. He is a member of the Garrett Planning Network, whose members provide financial advice to clients on an hourly, as-needed basis. Contact McPherson at david@fourpondsfinancial.com.